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Outsourcing Oreos becomes a campaign issue

CHICAGO -- In ten days, Michael Smith will lose his $25-an-hour union job at the Chicago plant that makes one of America's favorite snacks: the Oreo. He tells CBS News the company did not give the 600 workers who will be laid off an explanation.

He's in the first wave of layoffs as Nabisco, owned by Mondelez International, shifts Oreo production to a more modern facility in Salinas, Mexico -- a $46 million annual savings for Mondelez, which had $30 billion in revenue last year.

In a world where outsourcing and downsizing are commonplace, shifting hundreds of jobs abroad would not ordinarily be front page news -- except for this: the Oreo has become a campaign issue.

Donald Trump vowed in August to stop eating Oreos because of the move.

"If a company like Nabisco outsources and ships jobs overseas, we'll make you give back the tax breaks you received here in America," Democratic presidential candidate Hillary Clinton said during a speech last week.

oreo-nabisco.jpg
600 Nabisco employees will be laid off when the company closes its Chicago plant and relocates to Salinas, Mexico.
CBS News

In 1993, the company got a $90 million tax break to modernize the Chicago plant, but it evidently wasn't modern enough. And it now stands as a populist argument that companies should pay a price for sending jobs abroad to keep profits up.

A Mondelez spokesperson pointed out that the Oreo will still be made in New Jersey, Virginia and Oregon, and is currently produced in 18 countries worldwide. And she expressed the hope that consumers will not abandon the Oreo -- or what the company calls its "billion-dollar cookie."

As recently as 1993, the plant in Chicago employed 2,400 workers. There are 1,200 now, but after the layoffs, that will be cut in half.

And that's the way the cookie is crumbling.

  • Dean Reynolds

    Dean Reynolds is a CBS News National Correspondent based in Chicago.